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In an opinion affirming in part and reversing in part, Florida's Second District Court of Appeal found that a Trial Judge’s Order went too far when it forbade the borrower in a foreclosure case, who had surrendered the real property at issue in an earlier bankruptcy, to contest the foreclosure “in any manner” due to that bankruptcy surrender. In reversing in part, the Court of Appeal held that there are circumstances where a borrower may be allowed to challenge some aspects of a foreclosure case; for example, in the amounts due and owing, or other limited circumstances that may have arisen post-bankruptcy. Importantly, however, in affirming, the Second District Court of Appeal also ruled that surrender in a bankruptcy case means that in a subsequent foreclosure case a borrower is not entitled to challenge the lender’s own entitlement to foreclose. “Because the debtor’s interest has been surrendered, the debtor is no longer entitled to challenge the entitlement to foreclose the debtor’s former legal interest.” Note that this opinion is not final yet.
On March 31, 2022, the Indiana Court of Appeals issued its second decision relating to the collection of mortgage interest during the pandemic. At the beginning of the initial surge of COVID-19, the Indiana Supreme Court had granted Marion County Courts’ request to toll the time in which a litigant must meet deadlines and comply with rules of procedure. The emergency order granted relief beginning March 16, 2020, and stated that “no interest shall be due or charged during the tolled period”. By further orders, this tolling period was extended through August 14, 2020. Based upon those emergency orders, a trial court issued a judgment and decree of foreclosure that excluded interest due under the terms of the note and mortgage for the period of March 16, 2020, through August 14, 2020.
In PNC Bank v. Page, the mortgage lender asked the Court to overrule the trial court’s decision to remove that portion of interest, arguing that the emergency order’s tolling of interest could not apply to foreclosure cases. The lender pointed to Governor Holcomb’s Executive Order 20-06, which temporarily suspended the prosecution of foreclosure and eviction actions in Indiana, and explicitly stated that the suspension does not relieve a borrower’s obligations under a mortgage. Previously, the Indiana Court of Appeals had found that post-judgment interest could not be tolled by Indiana courts because it is awarded to the judgment holder by statute and falls under the legislative powers of the state. Denman v. St. Vincent Med. Grp., Inc., Ind. Ct. App. 2021. By the same reasoning, the Court agreed with the lender and held that the tolling period does not apply to pre-judgment interest in a mortgage foreclosure.
Impact on Servicers and Lenders in Indiana
This pair of rulings is great news for mortgage lenders in Indiana. The somewhat contradictory orders issued by Indiana’s legislative and judicial branches have led to inconsistent rulings in mortgage foreclosures over the past 18 months. Now that the apparent contradiction has been resolved, lenders can rest easy that their standard interest calculations are enforceable in Indiana. Questions? This post was prepared by Caryn Beougher, Esq, an attorney in PLG's Indianapolis, Indiana office. Contact us here.
FOR IMMEDIATE RELEASE
[Tuesday, March 22, 2022 | Atlanta, GA] Padgett Law Group (PLG) today announced the firm has received its no-objection status from Fannie Mae and Freddie Mac, clearing the final administrative task in entering the firm’s newest state of full-service creditors’ rights operations, Pennsylvania. The build-out of PLG’s Pennsylvania operations has been led by Jacqueline F. McNally, Esq., Managing Attorney of Judicial Foreclosure. Ms. McNally joined PLG in July of 2021 and shortly thereafter was promoted to her current firm-wide leadership role.
Ms. McNally has a long-standing reputation and legal career in the market. She previously managed the Pennsylvania and New Jersey operations of Schiller, Knapp, Lefkowitz & Hertzel, LLP; prior to that, she served as Chief Compliance Officer for Stern & Eisenberg, P.C., where she oversaw compliance matters across a 13-state footprint with over forty attorneys under her purview. Ms. McNally has over a decade of experience in creditors’ rights and is licensed to practice law in Pennsylvania, New Jersey, New York, Georgia, and the District of Columbia.
“In addition to Jackie’s firm-wide role leading our multi-state foreclosure practice, we are thrilled to have added a state where she has years of experience, connections, and a deep understanding of the issues. Jackie brings the depth of legal knowledge and breadth of management experience that clients associate with PLG,” said Chief Development Officer Robyn Padgett.
Other recent notable hires by PLG include the addition of Paul Huntington, Esq., Lead Attorney - Pennsylvania; Heather Griffiths, Esq., Supervising Attorney – Florida; Hadi Seyed-Ali, Esq., Senior Counsel – Legal and Advisory Oversight; Michael J. Burns, Managing Attorney –Non Judicial Foreclosure; along with the creation of nearly 50 other legal, supervisory, processing, and administrative roles across the firm's growing footprint and multi-state practices.
Questions about this release? Contact us at firstname.lastname@example.org for connection to Ms. McNally or to onboard PLG for Pennsylvania service.
Since the ruling in In re Nazario Hernandez, et al v. Franklin Credit Mgmt. Corp., et al, 19-35719 (9th Cir. 2020), there have been several attempts to unwind the devastation that the interpretation by the Federal Courts of Edmundson v. Bank of America, 378 P.3d 272, 278 (Wash. Ct. App. 2016) created. This was nearly achieved in Brown v. Deutsch Bank N.A. (In re Plastino), Nos. 17-11760-MLB, 20-01012-MLB, 20-01013-MLB, 20 Bankr. LEXIS 3597, at *6-7 (Bankr. W.D. Wash. Dec. 29, 2020). However, the matter settled prior to a ruling on the appeal.
Eastern District of Pennsylvania Rules that Third-Party Vendors of Law Firms are Debt Collectors
In Khimmat v. Weltman, Weinberg & Reis Co. LPA, the Eastern District of Pennsylvania recently held that the transmission of information to a vendor who completes a mailing is deemed a “communication” to a “person” in connection with the “collection of a debt” under section 1692c(b) of the FDCPA.
The law firm in this case, considered a debt collector in this circuit, used a third-party vendor to mail correspondence to the Borrower, which included the Borrower’s name, address, and information about the nature of the debt. The Court rejected an argument from the law firm that the mail vendor is an “agent” of the law firm, noting that the FDCPA does not explicitly carve out an exception for agents of debt collectors.
Not all circuits follow this logic in considering whether debt collectors can rely on letter vendors, so it is important to consult with legal counsel in the appropriate jurisdiction to determine whether use of these types of vendors is permissible under the FDCPA. Click here to read the full decision.
Questions? Contact us.
Contact us regarding this decision or other servicing issues in Pennsylvania. PLG's Managing Attorney of Foreclosure Operations, Jacqueline F. McNally, Esq., is licensed in Pennsylvania, New Jersey, New York, Georgia, and the District of Columbia. Click the button below to connect with Jackie.
Remote Online Notarization (“RON”) continues to grow in popularity across the country as the industry continues to navigate through the pandemic. The American Land Title Association (“ALTA”) conducted a survey of consumers who have used some version of RON as part of a real estate transaction. An overwhelming number of the consumers polled felt the RON process was safe and secure. ALTA published the results from a Virginia based title company showing that 95% of the surveyed consumers would recommend RON to other consumers.* Not surprisingly, the use of RON is on the rise and more and more states are enacting statutes allowing for some version of RON. As of July, ALTA noted that 37 states currently have a statute related to RON. We predict this number will increase in 2022 with the next cycle of legislative sessions convening.
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